Legal Review and Analysis of HT Media Limited vs Principal Commissioner Delhi South Goods and Service Tax 2026 INSC 66

Synopsis

This judgment addresses a significant classification dispute under the pre-2012 positive-list Service Tax regime. The core issue was whether fees paid by HT Media to international speakers through their booking agents for the "Hindustan Times Leadership Summit" constituted taxable "Event Management Service." The Revenue sought to levy tax under this category, while the appellant argued the services were merely for speaker procurement. The Supreme Court, applying the principle of strict interpretation of taxing statutes, held that the activity did not fall within the statutory definition of "event management," thereby allowing the assessee's appeal and quashing the tax demand.

1. Basic Information of the Judgment

Coram: J.B. Pardiwala, J. and K.V. Viswanathan, J. (Division Bench)
Jurisdiction: Civil Appellate Jurisdiction.
Case No.: Civil Appeal Nos. 23525-23526 of 2017.
Date of Judgment: January 16, 2026.

2. Legal Framework

The judgment revolves around the interpretation of the following provisions under the Finance Act, 1994 (the Service Tax law prior to July 1, 2012):

• Primary Statutory Provisions:
  Section 65(105)(zu): Defined "taxable service" as any service provided "to any person, by an event manager in relation to event management."
  Section 65(40): Defined "event management" to mean "any service provided in relation to planning, promotion, organizing or presentation of any arts, entertainment, business, sports, marriage or any other event and includes any consultation provided in this regard."
  Section 65(41): Defined "event manager" as "any person who is engaged in providing any service in relation to event management in any manner."
  Section 65(105)(k): Defined "taxable service" for "Manpower Recruitment or Supply Agency" service.
  Section 65(68): Defined "Manpower Recruitment or Supply Agency."
  Sections 66 & 66A: Provided for the levy of service tax and the reverse charge mechanism for services received from outside India.
  Section 65A: Provided rules for the classification of taxable services.

• Administrative Clarification:
  Tax Research Unit (TRU) Circular dated 08.08.2002: Clarified the scope of "event manager" to include managing venues, decoration, sound, light, security, communication, ticket sales, publicity, and managing stage shows and artists.

• Key Precedents Relied Upon:
  International Merchandising Company, LLC v. Commissioner, Service Tax, New Delhi (2023): Held that services for procuring a celebrity for an event were classifiable as "Manpower Recruitment or Supply Agency Service."
  Shiv Steels v. State of Assam (2025): Reiterated the principle of strict interpretation of fiscal statutes.
  Commissioner of Sales Tax v. Jaswant Singh Charan Singh (1967) & Indo International Industries v. Commissioner of Sales Tax (1981): Established the "common parlance test" for interpreting terms in taxing statutes.

3. Relevant Facts of the Case

The factual matrix leading to the dispute is as follows:

• The appellant, HT Media Limited, organized an annual "Hindustan Times Leadership Summit."

• It invited high-profile international speakers (like former heads of state) through their professional booking agents (e.g., Washington Speakers Bureau, Harry Walker Agency).

• The appellant paid the speaker fees to these overseas agents.

• For the period October 2009 to March 2012, the Revenue Department issued show-cause notices demanding service tax of approximately ₹60.56 lakhs.

• The demand was proposed under the "Event Management Service" category [Section 65(105)(zu)], invoking the reverse charge mechanism as the service was received from outside India.

• The Commissioner confirmed the demand. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the demand for the normal limitation period.

• The assessee appealed to the Supreme Court.

4. Issues Framed by the Court

The Supreme Court crystallized the primary issue for determination:

• Whether the fee paid by the appellant to the international speakers through their booking agents is liable to Service Tax under the reverse charge mechanism as "Event Management Service" under Sections 65(40), 65(41), and 65(105)(zu) of the Finance Act, 1994?

5. Ratio Decidendi and Court's Analysis

The Court's reasoning and holdings constitute the core of the judgment:

• Strict Interpretation of Taxing Statute: The Court reaffirmed the settled principle that a subject cannot be taxed by inference or analogy. The charge must fall "strictly within the four corners of the provisions of the taxing statute."

• Analysis of the Nature of Contract: Upon examining the agreements with the booking agents, the Court found they were purely for "booking a particular speaker." The contracts detailed the speaker's travel, accommodation, session duration, and media interactions, but were not contracts for "managing the event."

• Application of Statutory Definitions: The Court held that to qualify as "event management service," the service must be in relation to the planning, promotion, organizing, or presentation of the event as a whole. Merely procuring a speaker, even if essential, does not equate to "event management."
  The speaker does not plan, promote, or organize the summit.
  The booking agent, acting on behalf of the speaker, merely facilitates the speaker's participation. The agent is not engaged in managing the venue, decoration, sound, security, ticketing, or publicity—activities outlined in the TRU Circular and inherent in the common understanding of event management.

• Rejection of Revenue's "Integral Part" Argument: The Court rejected the Revenue's contention that because speakers were the main attraction, securing them was ipso facto event management. The Court distinguished between a component integral to an event and the service of managing the event. Procurement is a distinct, preparatory activity.

• Distinguishing Precedent (International Merchandising): The Court distinguished the cited precedent. In International Merchandising, the celebrity (Vijay Amritraj) was ancillary to the main event (Chennai Open tennis tournament). In the present case, the speakers were the essence of the Summit. However, this factual distinction did not alter the legal principle—the nature of the service provided by the agent was still "speaker procurement," not "event management."

• Common Parlance Test: The Court applied the "common parlance test," used in sales tax jurisprudence, to service tax classification. It held that in common understanding, a contract with an agent to book a speaker is not understood as hiring an "event manager."

• Classification Dispute Rendered Moot: The Court noted that since the service did not meet the definition of "event management" at all, the appellant's alternative argument—that it should be classified as "Manpower Supply Service" per International Merchandising—need not be conclusively decided. The absence of the essential ingredients of the charged category was sufficient to allow the appeal.

6. Legal Principles Clarified and Reaffirmed

This judgment reinforces and clarifies several key legal principles in indirect tax jurisprudence:

• Strict Interpretation in Positive List Regime: It underscores the non-negotiable requirement of strict interpretation for services taxed under the pre-2012 "positive list" regime. The revenue cannot stretch a statutory definition beyond its plain and common parlance meaning.

• Substance over Mere Importance: The functional role of a service provider, not the subjective importance of the component they supply, determines classification. An essential supplier is not automatically a manager.

• Primacy of Statutory Definition over Departmental Perception: The TRU Circular, which elaborates on the scope of a service, cannot expand the statutory definition. It can only explain what is already contained within it.

• Applicability of Common Parlance Test: The test, traditionally used for goods, is equally valid for classifying services under a positive list, ensuring commercial and practical understanding guides legal interpretation.

7. Critical Analysis and Final Outcome

Critical Analysis:
The judgment is a textbook application of the principle of strict construction in favor of the assessee in a taxing statute. The Court correctly focused on the specific language of the contract and the statutory definition, refusing to be swayed by the Revenue's broad-brush argument that securing the main speaker is "de facto" event management. This approach provides certainty to taxpayers and confines the Revenue to the letter of the law.

However, the Court's effort to distinguish International Merchandising on facts, while legally sound, highlights a potential ambiguity in classifying "procurement services" for events. A clearer exposition on why "manpower supply" was not even prima facie applicable in this case, despite the precedent, would have been beneficial for future guidance.

Final Outcome:
The Supreme Court allowed the appeals filed by HT Media Limited. The impugned order of the CESTAT was set aside. The demand for service tax under the category of "Event Management Service" on fees paid to speakers via booking agents was quashed.

(MCQs)

Under the pre-July 2012 Service Tax regime, the Supreme Court applied which primary principle to interpret the scope of "Event Management Service"?
a) Principle of purposive interpretation to maximize revenue.
b) Principle of strict interpretation confined to the four corners of the statutory definition.
c) Principle of equity and fairness.
d) Principle of consistency with international tax practices.

2. According to the Supreme Court, which of the following activities was NOT considered part of "event management" as per the TRU Circular and common parlance?
a) Managing venue decoration and sound systems.
b) Sale of tickets and publicity for the event.
c) Negotiating and contracting with a keynote speaker for the event.
d) Organizing security and communication for the event.

3. The Supreme Court distinguished the precedent in International Merchandising Company LLC primarily on which ground?
a) The service provider in the present case was located outside India.
b) The celebrity in International Merchandising was ancillary to the main event, whereas the speakers in the present case were the essence of the event itself.
c) The tax rate for "Manpower Supply Service" was lower than "Event Management Service."
d) The contract in the present case was in writing, while in International Merchandising it was oral.

4. What was the ultimate reason the Supreme Court did not find it necessary to conclusively decide if the service was "Manpower Recruitment or Supply Agency Service"?
a) The period of dispute had already lapsed.
b) The appellant had not pleaded this alternative before the lower authorities.
c) The Court found that the service did not satisfy the essential ingredients of the charged category ("Event Management Service") at all.
d) The Court referred the classification question back to the CESTAT for fresh determination.